By Tash Shifrin
8 April 2010
Birmingham City Council has admitted its £2.7bn highways Private Finance Initiative contract is still weeks away from being signed off, overshooting an April 1 deadline for works to begin.
Transport minister Paul Clark confirmed the award of more than £600m of PFI credits to the council after last month’s Budget.
But although work was expected to start this month after the selection of preferred bidder Amey last August, a council spokesman told Public Finance that the 25-year scheme was now ‘timetabled to commence in June’.
The scheme to repair and manage over 2,500 kilometres of highway, 96,000 street lights, 1,000 traffic signals and more than 850 bridges, tunnels and other structures is the largest of its kind in the UK. But it has been dogged by delay, with funding problems caused by the financial crisis slowing progress last year.
The spokesman said the huge project was now ‘likely to be weeks rather than months’ away from contract sign-off, adding: ‘The authority has been concluding the project’s final business case with the government and contract details with the preferred bidder.’
He said the Treasury Infrastructure Finance Unit – set up to bail out PFI schemes that were struggling to put financing packages together – had been ‘involved in the project as part of the funding group’. But he added that Tifu was ‘not providing funds as part of the final funding package’.
Len Gregory, the council’s Cabinet member for transportation and street services, said: ‘The PFI project is a significant undertaking. The council’s commitment of its highways budget, together with government support via a grant of more than £600m, will mean that its benefits will reach every resident and visitor to the city.’
Meanwhile, Greater Manchester Waste Disposal Authority faces renewed legal action from contractor Sita – an unsuccessful bidder for its £4.7bn PFI scheme. The High Court threw out Sita’s challenge to the award of the main £3.8bn contract to rival bidder Viridor Laing last month.
But Sita announced that it would appeal the decision after the judge, Mr Justice Mann, acknowledged grounds ‘for public interest reasons for an appeal’.
8 April 2010
Birmingham City Council has admitted its £2.7bn highways Private Finance Initiative contract is still weeks away from being signed off, overshooting an April 1 deadline for works to begin.
Transport minister Paul Clark confirmed the award of more than £600m of PFI credits to the council after last month’s Budget.
But although work was expected to start this month after the selection of preferred bidder Amey last August, a council spokesman told Public Finance that the 25-year scheme was now ‘timetabled to commence in June’.
The scheme to repair and manage over 2,500 kilometres of highway, 96,000 street lights, 1,000 traffic signals and more than 850 bridges, tunnels and other structures is the largest of its kind in the UK. But it has been dogged by delay, with funding problems caused by the financial crisis slowing progress last year.
The spokesman said the huge project was now ‘likely to be weeks rather than months’ away from contract sign-off, adding: ‘The authority has been concluding the project’s final business case with the government and contract details with the preferred bidder.’
He said the Treasury Infrastructure Finance Unit – set up to bail out PFI schemes that were struggling to put financing packages together – had been ‘involved in the project as part of the funding group’. But he added that Tifu was ‘not providing funds as part of the final funding package’.
Len Gregory, the council’s Cabinet member for transportation and street services, said: ‘The PFI project is a significant undertaking. The council’s commitment of its highways budget, together with government support via a grant of more than £600m, will mean that its benefits will reach every resident and visitor to the city.’
Meanwhile, Greater Manchester Waste Disposal Authority faces renewed legal action from contractor Sita – an unsuccessful bidder for its £4.7bn PFI scheme. The High Court threw out Sita’s challenge to the award of the main £3.8bn contract to rival bidder Viridor Laing last month.
But Sita announced that it would appeal the decision after the judge, Mr Justice Mann, acknowledged grounds ‘for public interest reasons for an appeal’.
